I faced an embarrassing situation some days ago when my bank refused to accept the new Rs 50 note, as the edges were damaged. One of the notes was actually torn, but all the numbers on it were correct and visible. What is the RBI guideline on this?
Amar Shah, Surat
There is no rule that disallows you from exchanging torn or soiled notes from the bank. In fact, the RBI has repeatedly stated that banks cannot refuse accepting soiled or torn notes, as long as in case of a torn note factors such as serial number and watermark are visible. In fact, according to a 2016 circular by the RBI, it is clearly mentioned that if a bank branch refuses to exchange soiled notes from any member of the public, the bank will have to pay a penalty of Rs 10,000. Like always, there are a few rules that one needs to follow—if you exchange more than 20 notes, or notes worth Rs 5,000 per day that are torn or soiled, the banks may levy a service charge or fee linked to the denomination being exchanged.